Duchess’ favourite store in CVA; ski firm collapses; hotels is desperate struggle to survive; construction outfit liquidated; Welsh manufacturer goes bust
Jigsaw seeks CVA
Suppliers to retailers have been taking a hammering during the pandemic with their latest worries centred on Kate Middleton’s fashion favourite Jigsaw – according to the national press.
The firm is set to shed jobs and shut stores as it struggles to survive ahead of a reported Company Voluntary Agreement (CVA) with uncertainty for its 900 staff. It follows the collapse of Oasis, Warehouse, Cath Kidston and Laura Ashley as the list of retailers going west continues. Jigsaw is owned by Carphone Warehouse tycoon David Ross. New Look is also looking at a massive restructuring with demands on their landlords to lower rents to match turn-over.
Cold winds of recession
Capital Cooling Refrigeration Limited has been sold in a pre-pack after it failed to secure government support following financial difficulty caused by the pandemic.
Edward Delvin of the Grocer reported: “Recovery firm Quantuma was appointed as administrator on 30 July and secured a pre-pack sale to Beheren Ltd, a company controlled by Capital Cooling’s private equity owner R Capital Partners. The majority of the 47 employees have been retained, but a small number were made redundant by the company prior to the administration. It is the second time the business has fallen into administration, with R Capital buying the business in 2017 in a pre-pack deal. The PE firm restructured the company, installed a new CEO, closed the services division, diversified the offering and expanded its national delivery network.”
Suppliers may wonder why the firm was unable in its statement on its website to give details of the closure of its Edinburgh office with a switch to a cheaper site in Livingstone. Ian Carrotte of ICSM Credit said there are concerns among suppliers who are owed cash at the lack of clarity in Capital Cooling’s statement which dressed up the pre-pack as a move to Kettering and Livingstone rather than drastic cost cutting which was likely to be the reality.
Downhill for ski firm
UK tour operator Ski Weekends has entered administration following the collapse of the holiday industry during Covid-19. The owners are Harris Holidays Limited who trade as Ski Weekends organising trips for groups of winter holiday fans from 17 UK airports to resorts, chalets and hotels across Europe. The holiday outfit was unable to raise enough funding to refund their customers for cancelled trips and had not been able to secure Government funding. Ski Weekends’ Managing director Dan Fox said: “The UK government has been appalling in its help of the tourism sector. A few fine words, but precious little action. Most of the European countries have offered practical help, hard cash, to support their tourist industries and companies. Not so the UK government.”
Ski Weekends employ 14 staff at its Southampton head office with 30 overseas staff and handles 6,000 customers each winter. Ian Carrotte of ICSM Credit said it was unlikely to be the last holiday business to enter administration during the coronavirus crisis and warned suppliers to ensure they are paid up front.
Warning to hotel suppliers
ICSM Credit is extremely concerned for suppliers to hotels following the news that Crowne Plaza, Holiday Inn and Hallmark hotels were sacking 1,500 staff in a desperate attempt to stay afloat. The pandemic has hit the hospitality industry hard and already several hotels and hotel chains have gone to wall.
From brochures to bed linen and from brandy to bacon hotels buy an extraordinary range of goods and with little cash flow during the lock down it is no surprise there is a problem with paying suppliers.
The aforementioned hotels are managed by LGH in England and Scotland with 55 properties, and employ 2,500 staff – many of who were furloughed but now face redundancy.
“It’s a pattern that has become familiar,” said Ian Carrotte on ICSM Credit, “if you have a customer who has furloughed staff and are struggling to reopen then granting credit on generous terms is a mistake. Once a business fails or is on the brink of failing, suppliers are the last to be paid.”
Intercontinental Hotels and the Fraser Group of hotels are also looking to shed staff as businesses go into the red. Officially unemployment is close to 3m and is expected to rise as furloughing ends.
Construction firm crumbles
The Cheshire construction firm Cruden has gone into administration writes Ian Weinfass in Building. He reported: “Around 100 people have been made redundant at Cheshire-based Cruden Group, with administrators declaring the coronavirus crisis tipped the firm over the edge. KPMG’s appointment was confirmed on Friday, a week after the company – whose subsidiaries included Cruden Construction and Cruden Property Services – filed a notice of intent to appoint an administrator. The firm was based near Warrington and carried out operations across the North West. It employed 126 people in total.”
KPMG said in a statement: “Regrettably, upon appointment, the administrators made circa 100 employees redundant, with the remaining staff being retained to support the wind down of the business.”
KPMG ‘s Howard Smith said: “While trading had been challenging for some time, the impact of COVID-19 was the final straw. Discussions to sell the business did not progress, leaving no option but to close.”
Wire firm goes under
Wrexham Wire in Wales has fallen into administration with Anthony Collier and Ben Woolrych of advisory firm FRP have been appointed as joint administrators. The company closed on August 3 and will not reopen. Most of Wrexham Wire’s 88 employees have been made redundant, with some retained to support the company’s winding down.
FRP’s Anthony Collier said: “Wrexham Wire, like many of Britain’s industrial businesses, has faced a catalogue of challenges in recent months as it contended with a weakening global economy, political uncertainty and the disruption of the pandemic.”
About ICSM Credit
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